Section 9(3) of the CGST Act, 2017--- Reverse Charge Mechanism —- The petitioner carrying on business of advertising and providing advertising solutions to various parties, submitted that amount of GST has been paid by him to the Railways as per contract terms. The counsel for the Railways admitted that Petitioner had paid the tax amounts to Railways. But as per the provisions of Section 9 (3) and Section 5(3) of the IGST Act, the tax payable by the recipient of the goods or services or both, as was applicable in the case at hand, shall be paid on reverse charge basis. The court observed that the Petitioner has paid the SGST and CGST, but has paid those amounts to Railways instead of paying it directly to the concerned tax authorities. The Petitioner has not attempted to evade any tax. The Petitioner has made a mistake. The court directed Respondent No.5 to ensure that the amounts which have been wrongly paid by Petitioner to Railways should be paid to the CGST authorities and SGST authorities within two weeks.  After this order was dictated, learned ASG submitted that since the GST payments are made electronically and the system will only accept when the payment is made by party concerned.

Held that:- The Hon’ble Court directed the Respondent No.5 to pay this amount to Petitioner within one week. Petitioner shall pay this amount within one week after receiving the credit in its account. The CGST authorities and SGST authorities would consider Petitioner’s case sympathetically when it comes to interest and penalty. Unless they have some other reason, Petitioner should not be saddled with interest and penalty.